Oil extends gains on supply concerns, weak dollar

                                
 By Fayen Wong
                                
 PERTH, May 26 (Reuters) - Oil rose towards $133 a barrel on
Monday, extending the previous session's gains, due to a supply
outage at the large Statfjord oilfield in the North Sea and a
weak U.S. dollar.
                                
 U.S. light crude for July delivery <CLc1> rose 40 cents to
$132.59 a barrel by 0017 GMT. It settled up $1.38 at $132.19 a
barrel on Friday after striking a record high of $135.09 in
intraday trade last week.
                                
 London Brent crude <LCOc1> rose 30 cents to $131.87.
                                
 "The market is continuing to focus on supply side concerns
and the outage at Statfjord fields is an issue," said Gerard
Burg, a commodities analyst at the National Australian Bank.
                                
 Analysts said continued weakness in the U.S. dollar was
also supporting oil's rise.
                                
 An oil spill at Statfjord shut about 138,000 barrels per
day of production on Saturday and triggered the evacuation of
workers, operator StatoilHydro said.
                                
 StatoilHydro said on Sunday the oil spill had been cleaned
up, all workers had returned to the platform and preparations
were under way to restart production. [ID:nL25701695]
                                
 Worries that supply would struggle to keep up with demand
over the next few years also supported prices.
                                
 OPEC Secretary-General Abdullah al-Badri said on Friday he
was not worried about reports of faster-than-expected depletion
in the world's biggest oil fields and repeated his position
that runaway oil prices were caused by speculation and not by
supply problems. [ID:nN23330405]
                                
 A Reuters survey last week showed that non-OPEC production
had stagnated and would remain below 50 million barrels per day
this year. [ID:nL22759577]
                                
 Oil prices have climbed by around a third since the start
of the year as investors seeking a hedge against inflation and
the falling U.S. dollar pile into commodities.
                                
 Analysts said concern that record oil prices could dent
global demand was the key downside risk.
                                
 European Central Bank President Jean-Claude Trichet said
the potential economic fallout from financial market turmoil,
along with rising food and commodity prices, could shock the
economy further [ID:nSP262467], while Vice President Lucas
Papademos said inflation pressures had intensified due to
rising oil prices, which were also dampening growth
[ID:nL2589926].
                                
 In the U.S., data released on Friday showed that highway
miles driven in March fell 4.3 percent from a year earlier, the
first time this has happened in March since the last major oil
shock in 1979.
                                
 Road travel during the Memorial Day holiday over the
weekend was expected to be 1 percent lower than last year, the
first such decline since 2002.
                                
 Crude oil speculators on the New York Mercantile Exchange
trimmed net long positions last week, according to data from
the Commodity Futures Trading Commission released on Friday.
                                
 Net long positions fell to 50,060 in the week to May 20
from 71,767 the previous week.
 (Reporting by Fayen Wong; Editing by Alan Raybould)